May 20, 2014 / 6:56 PM / 4 years ago

What to Watch in The Day Ahead; Wednesday, May 21

(The Day Ahead is an email and PDF publication that includes the day’s major stories and events, analyses and other features. To receive The Day Ahead, Eikon users can register at . Thomson One users can register at RT/DAY/US. All times in ET/GMT) The Federal Reserve is scheduled to release minutes from its April policy meeting. While the Fed is not expected to raise interest rates until at least the middle of next year, investors will be keen to learn whether the officials discussed the myriad issues they will need to confront when the time comes. A debate is underway about the desirability of changing how they manage short-term interest rates, with the possibility that their long-term policy lever - the federal funds rate - will be de-emphasized. The central bank also needs to decide at some point the degree to which it actively wants to shrink its now $4.3-trillion balance sheet. Separately, the U.S. Senate is expected to confirm former Bank of Israel Governor Stanley Fischer to be the No. 2 at the central bank. Federal Reserve Chair Janet Yellen is scheduled to give a commencement address and receive an honorary degree in New York (1130/1530). Federal Reserve Bank of Kansas City President Esther George is expected to speak on the U.S. economy and banking in Washington and Federal Reserve Bank of Minneapolis President Narayana Kocherlakota is scheduled to speak on monetary policy and the economy before the Economic Club of Minnesota in Minneapolis. (1330/1730) Home improvement retailer Lowe’s was one of the few retailers to benefit from the extreme cold weather that plagued the fourth quarter as shoppers snapped up heaters, snow blowers and fittings to fix broken pipes among other items. This benefit is likely to have continued into the first quarter due to the persistent cold weather in February and March. When the company reports first-quarter results before the market opens, investors will be eager to see whether it was able to further narrow the gap with market leader Home Depot and will also be looking out for any updates on Lowe’s outlook for the year. Target fired CEO Gregg Steinhafel earlier this month following a massive data breach during the holiday season and its botched Canadian expansion, which led to significant damage to its reputation and hit sales. All eyes are now on CFO-turned-CEO John Mulligan to fix Target’s Canadian operations and get back U.S. customers spooked by the payment card breach. Analysts caution the company’s first-quarter results, expected before the markets open, could be hampered by the colder-than-usual winter in the United States, just like Wal-Mart’s was. Tiffany is expected to report first-quarter results amid signs that sales in its U.S. home market is finally starting to show improvement. Investors will be keen to know if the company can keep up the momentum and will look for updates on sales of silver jewelry and items priced below $500, which it has been struggling to boost, and for additional increases to its $300 million share repurchase program. Struggling teen apparel retailer American Eagle Outfitters, which has been hurt by choppy sales trends at malls, is scheduled to announce first-quarter results. The company forecast first-quarter earnings below the average analyst estimate as intense competition from fast-fashion chains keeps shoppers away. Adverse winter weather reduced earnings by 3 cents per share in the quarter, the company has estimated. NetApp, which makes storage systems and data management software, is likely to report inline fourth-quarter results, according to StarMine data. The company has forecast lower-than-expected revenue for the quarter. At least three brokerages have downgraded NetApp’s stock since the company reported quarterly results in February. Asset manager Eaton Vance’s second-quarter results are expected to be in line with estimates, according to StarMine data. Analysts will be looking at the performance of the company’s equity funds, which have witnessed outflows recently, despite the rising stock market. Bristow Group, which provides helicopter services to the offshore energy industry, is expected to report a higher fourth-quarter profit, driven by a higher number of orders. Investors expect demand for helicopters to soar in the coming quarters. Brazil’s government statistics agency IBGE is expected to report that 12-month inflation rate climbed closer to the 6.5 percent central bank target ceiling, but food prices - the greatest villain of the recent inflation spike - will probably show some moderation. If that is confirmed, the central bank may feel comfortable to keep interest rates on hold for the first time in more than one year in its upcoming rate-setting meeting. (0800/1200) (Compiled By Ayesha Sruti Ahmed in Bangalore)

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